Dealers Should Listen To This Threat

Amy Cappellazzo, who is in charge of contemporary art at Christie’s, crowed in a recent interview, “We’re the big-box retailer putting the mom-and-pops out of business”. (The New Yorker Magazine-TEMPTATIONS OF THE FAIR Miami virtue and vice, by PETER SCHJELDAHL, Issue of 2006-12-25 and posted 2006-12-18)

This is a statement about an area of the market that is strong for dealers, just think about the impact this Christie’s (and I would think Sotheby’s) auctioneer’s business plan must have on weaker segments of the art and antiques trade. It’s a hard statement to ignore, but of course dealers and their elitist representative organizations around the world still have their heads in the ground as they idly experience their decline and disengagement from the market.

Today’s dealer is really becoming a non-essential element in the trade because individual dealers have lost the ability to match the weight of a Sotheby’s or Christie’s in every aspect of the business. It is a combination of the auctioneer’s well funded operations, corporate efficiencies, and method of operation (which is blatantly illegal in my opinion-read my last couple of blogs) that have created all the advantages of the big-box retailer.

But the bottom line in the development of any successful market is the critical ability to create the proper environment for the market mechanism to operate efficiently. The bid/ask process is the heartbeat for a hedge fund trader, the real estate broker, and should be for buying and selling antiques. Ask a hedge fund dealer or a real estate broker if they think the products they trade are headed for the auction route.

The problem with dealers is that they don’t get this fact. They have not created an open marketplace for their goods in this age when technology can offer price transparency. I know dealers will say you “can’t compare antiques”, but an efficient marketplace can. In order for dealers to fight the auctioneers’ tactics, and their collective doom, a creative and dynamic marketplace must be established, where strength in the numbers of traders and merchandise can make a market. Oh, and if it works, all dealers, collectors, art & antiques aficionados win.